MILITARY HANDBOOK · MIL-HDBK-965 1. SCOPE. 1.1 Purpose. This handbook is a guide for Military Acquisition Activities (AA) in the evaluation of contractor responses to Requests for

MIL-HDBK-965

26 September 1996 SUPERSEDING MIL-STD-965B 22 JANUARY 1993

MILITARY HANDBOOKACQUISITION PRACTICES FOR

PARTS MANAGEMENT

AMSC N/A FSC SDMPDISTRIBUTION STATEMENT A. Approved for public release; distribution is unlimited

NOTE: This standard has been extensivelyrevised, reformatted, retitled and convertedto a military handbook.

NOT MEASUREMENT SENSITIVE

MIL-HDBK-965

FOREWORD

1. This handbook is approved for use by all Departments and Agencies of the Department of Defense.

2. This handbook is for guidance only.

3. Beneficial comments (recommendations, additions, deletions) and any pertinent data which may beof use in improving this document should be addressed to: Commander, Defense Supply Center,Columbus, ATTN: DSCC-VS, 3990 East Broad Street Columbus, OH 43216-5000, by using theStandardization Document improvement Proposal (DD Form 1426) appearing at the end of thisdocument or by letter.

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CONTENTS

PARAGRAPH PAGE

1. SCOPE...................................................................................................................................11.1 Purpose ..................................................................................................................................11.2 Intended use ...........................................................................................................................11.3 Application ..............................................................................................................................1

2. APPLICABLE DOCUMENT.....................................................................................................22.1 Government document ...........................................................................................................22.1.1 Specification, standards, and handbooks.................................................................................22.2 Order of precedence ...............................................................................................................2

3. DEFINITIONS.........................................................................................................................33.1 Acquisition Activity (AA) ..........................................................................................................33.2 Approved corporate baseline...................................................................................................33.3 As-built parts list......................................................................................................................33.4 As-designed parts list ..............................................................................................................33.5 Diminishing Manufacturing Sources and Material Shortages (DMSMS) ...................................33.6 Government Furnished Baseline (GFB) ..................................................................................33.7 Government-Industry Data Exchange Program (GIDEP) .........................................................33.8 Integrated Production Team (IPT) ...........................................................................................33.9 Life cycle ................................................................................................................................33.10 Military Parts Control Advisory Group (MPCAG) .....................................................................33.11 Modernized Parts Control Automated Support System (MPCASS) ..........................................43.12 Non-Development Item (NDI) ..................................................................................................43.13 Non-Government Standard (NGS) ..........................................................................................43.14 Nonstandard part ....................................................................................................................43.15 Off-The-Shelf (OTS) ...............................................................................................................43.16 Original Equipment Manufacturer (OEM) ................................................................................43.17 Part.........................................................................................................................................43.18 Parts Control Board (PCB) ......................................................................................................43.19 Part or Identifying Number (PIN) .............................................................................................43.20 Program Parts Selection List (PPSL).......................................................................................43.21 Proliferation ............................................................................................................................43.22 Replacement part....................................................................................................................43.22.1 Alternate part ..........................................................................................................................43.22.2 Substitute part.........................................................................................................................43.23 Standard part ..........................................................................................................................4

4. GENERAL GUIDANCE ...........................................................................................................54.1 General...................................................................................................................................54.1.1 Data........................................................................................................................................54.1.2 Options ...................................................................................................................................54.1.3 Levels .....................................................................................................................................54.1.4 Considerations ........................................................................................................................54.2 Application to OTS and NDI ....................................................................................................64.3 Order of preference in parts selection .....................................................................................64.4 Replacement parts ..................................................................................................................64.5 Source selection considerations ..............................................................................................74.5.1 Parts management criteria ......................................................................................................74.5.2 Parts quality and availability ....................................................................................................74.6 Alternate proposal ...................................................................................................................74.7 Acquisition activity ..................................................................................................................74.7.1 Pre-contract award..................................................................................................................74.7.2 Post-contract award ................................................................................................................84.7.3 Defense Logistics Agency Military Parts Control Advisory Groups...........................................84.7.4 Contractor ...............................................................................................................................8

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CONTENTS

PARAGRAPH PAGE

5. DETAIL GUIDANCE................................................................................................................95.1 Parts management option flexibility and tailoring ....................................................................95.1.1 Option A - No formal Government guidance ............................................................................95.1.2 Option B -AA guidance through program reviews and IPTs .....................................................105.1.3 Option C - Government guidance with as-built parts list ..........................................................115.1.4 Option D - Government advisor in parts selection ...................................................................125.2 Government/Industry data exchange program (GIDEP) ..........................................................135.3 Diminishing Manufacturing Sources (DMS) requirement .........................................................13

6. NOTES ...................................................................................................................................146.1 Comparison of options ............................................................................................................146.2 Applicable part categories .......................................................................................................156.2.1 Mechanical parts .....................................................................................................................156.2.2 Electrical and electronic parts .................................................................................................166.3 Subject term (key word) listing ................................................................................................176.4 Changes from previous issues ................................................................................................17

FIGURES

1 Option A - no formal Government guidance ............................................................................182 Option B - Government guidance through program reviews and IPTs .....................................183 Option C - Government guidance with as-built parts list ..........................................................184 Option D - Government advisor in parts selection ...................................................................18

APPENDIX A

PARAGRAPH PAGE

A.1 GENERAL...............................................................................................................................18A.1.1 Scope .....................................................................................................................................18A.1.2 Application ..............................................................................................................................18A.1.3 Tailoring assistance ................................................................................................................18

A.2 STATEMENT OF WORK EXAMPLES ....................................................................................19A.2.1 Tasks for the four options........................................................................................................19A.2.1.1 Option A..................................................................................................................................19A.2.1.2 Option B..................................................................................................................................19A.2.1.3 Option C .................................................................................................................................19A.2.1.4 Option D .................................................................................................................................20A.2.2 DMS task ................................................................................................................................21A.2.3 GIDEP task.............................................................................................................................21

APPENDIX B

PARAGRAPH PAGE

B.1 GENERAL...............................................................................................................................22B.2 FORMS OF INCENTIVES.......................................................................................................22B.3 ITEMS WORTHY OF INCENTIVES........................................................................................22B.4 METRICS ...............................................................................................................................23

CONCLUDING MATERIAL..................................................................................................................24

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1. SCOPE.

1.1 Purpose. This handbook is a guide for Military Acquisition Activities (AA) in the evaluation ofcontractor responses to Requests for Proposals (RFPs) with respect to parts program management andstandardization and will help determine to what extent parts management and standardization should befor a given program. It will also identify those attributes in a proposal that will promote effective partprogram management and standardization. This document will also provide insight for the contractor inthe preparation of RFP responses in that it will allow the contractor to identify parts managementprogram attributes that are considered important by the government. This document was developed inorder to provide for the accomplishment of the following objectives in a manner consistent withDepartment of Defense (DoD) acquisition reform initiatives:

a. Minimize the proliferation of parts and drawings through standardization;

b. Enhance the interchangeability, reliability, and availability of parts;

c. Minimize diminishing source impacts and parts obsolescence;

d. Assist with parts selection and qualification procedures;

e. Become compatible with the business environment and trends;

f. Assist in meeting end item performance requirements in a cost effective manner, throughout thelife cycle of the item (i.e., development, manufacturing, test and evaluation, verification,deployment, operations, support, training and disposal).

g. Promote the use of Non-Government Standards (NGSs) usage covering commercial/industrial parts (see 4.3) in support of DoD Military Specification Reform Policy.

1.2 Intended use. This document provides tailorable parts management options for new designs andmodifications where life cycle cost benefits can be derived.

1.3 Application. This document contains tailorable options for defining appropriate levels of partsmanagement for all types of military programs. One or more options may apply depending on programbusiness and support strategy, technologies used, etc. This document is to assist the Acquisition Activity(AA) in preparing Requests for Proposal (RFPs), Statements of Objectives (SOO), Statements of Work(SOWs) 1/, offeror instructions, etc. This document is also to assist contractors in preparing proposalsand structuring their parts management processes. Applicable mechanical and electrical/electronic partcategories are covered in 6.2.

__________1/ The Air Force is now using Statement of Objectives (SOO) in lieu of statement of work. Throughout this document only the SOW acronym will be used and should be construed to include SOO.

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2. APPLICABLE DOCUMENT.

2.1 Government documents.

2.1.1 Specifications, standards, and handbooks. The following specifications, standards, andhandbooks form a part of this document to the extent specified herein. Unless otherwise specified, theissues of these documents are those listed in the Department of Defense Index of Specifications andStandards (DoDISS) and supplement thereto.

HANDBOOKS

DEPARTMENT OF DEFENSE

MIL-HDBK-179 - Microcircuit Acquisition HandbookMIL-HDBK-402 - Guidelines for the Implementation of the DoD Parts Control Program

(Unless otherwise indicated, copies of the above specification, standards, and handbooks are availablefrom the Standardization Document Order Desk, 700 Robbins Avenue, Building 4D, Philadelphia, PA19111-5094.)

2.2 Order of precedence. In the event of a conflict between the text of this document and thereferences cited herein, the text of this document takes precedence. Nothing in this document, however,supersedes applicable laws and regulations unless a specific exemption has been obtained.

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3. DEFINITIONS.

3.1 Acquisition Activity (AA) . The Government office or agency that is responsible for acquiring themilitary system or equipment.

3.2 Approved corporate baseline. A listing of Acquisition Activity approved parts for use in militarysystem or equipment design application. The contractor creates and maintains this listing.

3.3 As-built parts list. A listing of all parts actually used in a military system or equipment design.

3.4 As-designed parts list. A listing of all parts used in the design of the military system or equipment. For contracts not requiring a production unit, the as-designed parts list becomes the as-built parts list.

3.5 Diminishing Manufacturing Sources and Material Shortages (DMSMS). The loss or impendingloss of manufacturers of items, reduction of suppliers of items, or shortages of raw material. DMSMS iscaused by manufacturers of items or suppliers of raw material who discontinue production. Some of thereasons for DMSMS situations are:

• Rapid changes in technology which cause obsolescence;

• Uneconomical production requirements and increasing emphasis on use of commercial products;

• Foreign source competition;

• Federal environmental and safety regulations;

• Limited availability of items and raw materials used in the manufacturing process.

DMSMS situation tend to have a pervasive effect that precludes repair of materiel and preventsprocurement of additional systems, equipment, spare assemblies, and subassemblies that depend on theavailability of items and raw materials that are no longer manufactured or available.

3.6 Government Furnished Baseline (GFB). A listing of standard parts recommended for selectionand application in new designs or modifications. The Military Parts Control Advisory Group creates,maintains, and provides the GFB.

3.7 Government-Industry Data Exchange Program (GIDEP). A cooperative program to supportgovernment systems readiness, logistics effectiveness, productivity, and cost reduction through timelyretrieval, storage, and distribution of data among government and industry organizations.

3.8 Integrated Product Team (IPT). IPTs are composed of representatives from all appropriatefunctional disciplines working together to build successful programs and enabling decision-makers tomake the right decisions at the right time producing a system or equipment. Individuals from variousdisciplines representing the acquisition activity, Military Parts Control Advisory Group, consultingcontractor(s), prime contractor(s), subcontractor(s), and parts suppliers may comprise this team.

3.9 Life cycle. The time period from development to disposal of systems or equipment; including manufacturing, test and evaluation, verification, deployment, operations, support and training (i.e., cradleto grave).

3.10 Military Parts Control Advisory Group (MPCAG). A Government organization that provideadvice and recommendations on the selection and use of preferred standard and nonstandard parts.

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3.11 Modernized Parts Control Automated Support System (MPCASS). An on-line automated dataprocessing system that supports the parts management program as defined in this document. Thesystem is available for use by military acquisition activities, prime contractors, subcontractors, andMPCAG personnel. The system is used to process part evaluations and to provide a database of partsbeing used in a military system or equipment.

3.12 Non-Developmental Item (NDI) . System or equipment with little or no development effortrequired by the Government on the current contract. This definition does not apply to the part level (see3.17).

3.13 Non-Government Standard (NGS). A standard or specification developed and maintained by anational consensus standard society or organization.

3.14 Nonstandard part. Any part other than a standard part (see 3.23).

3.15 Off-the-Shelf (OTS). An item developed and produced to military or commercial standards andspecifications, available for delivery from an established source, and acquired without change, to satisfya military requirement. This definition does not apply to the part level (see 3.17).

3.16 Original equipment manufacturer (OEM). The contractor who developed the original design ofthe system or equipment and produced at least a prototype model.

3.17 Part. One piece, or two or more pieces joined together, which is not normally subject todisassembly without destruction or impairment of intended design use. The categories of parts that aresubject to this document are in 6.2 of this document.

3.18 Parts Control Board (PCB). An organization that ensures an efficient parts managementoperation and timely implementation of parts selection and documentation decisions. The PCB istypically for large programs where several prime contractors, an integrating contractor, and/or manysubcontractors will participate in the program.

3.19 Part or Identifying Number (PIN). An alpha-numeric designator which identifies parts, items, orbulk materials that are covered by a specification.

3.20 Program Parts Selection List (PPSL). A list of all parts (both standard and nonstandard) beingselected by the contractor(s)/subcontractor(s) for design on a specific contract. The PPSL may alsocontain parts selected from the GFB. The PPSL is a tool to indicate standardization activity evaluationsand to verify compliance with contract requirements.

3.21 Proliferation. Parts which have various characteristics, nomenclatures, or any other means todifferentiate between variations of the same part.

3.22 Replacement part. A part other than that specified on a parts list. Types of replacement partsare in 3.22.1 and 3.22.2.

3.22.1 Alternate part. A part that is equal to or better than the part specified on a parts list. Thesemay be: (1) parts listed in a specification or standard as superseding parts; (2) upgraded or better thanparts (such as JANTX in place of JAN, Standard Microcircuit Drawing parts in place of vendorunscreened parts, military temperature range parts in place of commercial temperature range parts); or (3) equivalent or interchangeable parts that are functionally, mechanically, and of the same quality as thespecified parts, such as from a different vendor.

3.22.2 Substitute part. A part whose performance may be less capable than the part specified on aparts list for one or more reasons (i.e., quality or reliability level, tolerance, parametrics, temperaturerange, etc.).

3.23 Standard part. A part widely used, as determined by the MPCAG in the categories in 6.2. Alternatively, the SOW may define which parts are standard for the contract, equipment, or system.

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4. GENERAL GUIDANCE.

4.1 General. The selection and application of parts are the responsibility of the contractor whoseprimary objective is to meet the performance requirements of the system or equipment. To assuremeeting those objectives, the contractor may have parts engineering processes and procedures similarto those in MIL-HDBK-179 and MIL-HDBK-402. The AA should become familiar with these documentsbefore assessing the contractor proposals, plans, and effort.

4.1.1 Data. The AA may stipulate, in the contract solicitation or RFP and in the SOW, some type orlevel of data to be provided to themselves and/or MPCAG. This data may be used to:

a. Provide guidance to the contractor for minimizing parts proliferation.

b. Evaluate system or equipment expected operating performance.

c. Assess contractor performance against a parts management plan.

d. Review the anticipated logistics support.

e. Inform the MPCAG of industry usage of parts so that MPCAG can focus on specificationproblems and trends for standardization and update the GFB.

4.1.2 Options. Depending on the application and technical or logistics concerns, four predeterminedparts management options are available to the AA for specifying the contractor data to be provided.

4.1.3 Levels. For purposes of spanning the potential approaches to parts management and offeringflexibility for meeting all or most acquisition circumstances, the four options define distinct levels of partsmanagement and Government involvement from no Government oversight to directed Governmentinvolvement in parts selection. Any of these four options may be tailored in the RFP or SOW to revisethe data requirements, to specify IPT, or to provide program review details for monitoring contractoreffort.

4.1.4 Considerations. The following considerations contain options for various levels of AA participationand contractor data requirements. The AA must select or tailor the degree of data and AA oversightrequired. The option with the least participation and data submittals, consistent with assessing contractorperformance, is preferred to avoid unnecessary cost to the contractor, the AA, and MPCAG.

Option A - No formal Government guidanceNo Government logistics/depot support requiredNo organic repair/maintenance of system or equipmentExamples:

Unique, limited purchases of test equipmentCommercial or NDI

Option B - AA Guidance through program reviews and IPTsNo Government logistics/depot support requiredNo organic repair/maintenance of system or equipmentExamples:

Limited quantities of systems or equipments with no follow -on contractPrototype proof of concept (not to be used as future baseline)

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Option C - Government guidance with as-built parts listLimited Government logistics/depot support requiredNo line repair/maintenance below depot levelExamples:

Major procurementsSubsystems of major procurements

Option D - Government advisor in parts selectionGovernment logistics/depot support requiredFull line/depot repair/maintenanceExamples:

Major procurementsSubsystems of major procurementsHigh reliability program such as space operations

Appendix A contains suggested, tailorable task statements that may be used in a SOW. Detailedguidance for implementation of these options is addressed in 5.1.

4.2 Application to OTS and NDI. Parts contained in commercial and NDI equipment used in the enditem are not subject to the parts management procedures described in options B, C, and D unlessrequired by the AA in the RFP and/or the SOW. In response to the RFP, the prospective contractorshould identify the commercial and NDI systems, subsystems, or assemblies for use under the contractto the extent possible. When commercial and NDI equipment requires modification, only the new partsproposed for modification of the equipment should be subject to the appropriate parts selectionprocedures described herein.

4.3 Order of preference in parts selection. Unless otherwise specified in the contract, the contractorshould select parts in the descending order of preference as follows:

a. Parts required to meet Government regulatory organizations’ regulations.

b. Parts defined by standards produced by recognized national consensus standards societies and organizations.

c. Military or Government standard parts.

d. OEM corporate standard type parts.

e. Source control drawings or vendor item drawings.

f. Parts identified by part manufacturer part numbers which are controlled by their drawings, catalogs, or company standards.

4.4 Replacement parts. The process for the management and documentation of parts, other thanthose on an as-built or as-designed parts list, should be specified in the SOW or by a program documentspecified in the SOW. In specifying the part replacement process, care should be taken to ensure thatthe program is consistent with the intent and application of other systems engineering disciplines (e.g.,reliability, configuration management, quality, logistics, etc.). These disciplines are interdependent withthe parts management program and the activities of each should be coordinated. The part replacementprocess should address the scope of management for each phase of hardware manufacture (i.e.,prototype, preproduction, and production).

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4.5 Source selection considerations. The AA or designated representative should review thecontractor's proposed parts management plan or internal parts management procedures for the criterialisted in the following subparagraphs. (NOTE: The criteria listed below are tailorable to the partsmanagement option chosen by the AA.)

4.5.1 Parts management criteria. In order to manage the selection and use of parts to reduce lifecycle cost and to avoid unnecessary proliferation of part types, the contractor should have procedures to:

a. Define the parts selection process or criteria, including an order of preference.

b. Use the MPCAG for part information.

c. Use GFBs to enable selection of standard parts.

d. Establish the parts evaluation and authorization processes.

e. Use and maintain an approved corporate baseline, parts selection list, or other database to givevisibility to designers and subcontractors of parts preferred for use.

f. Provide parts usage data to the MPCASS database.

g. Manage subcontractors.

4.5.2 Parts quality and availability . To ensure part quality, enhance equipment/system reliability andsupportability, and reduce DMS occurrences, the contractor should have provisions for:

a. Assessing parts suppliers.

b. Documenting and maintaining part failure information.

c. Using GIDEP data.

d. Using DMS information databases.

e. Enhancing competitive reprocurement of spares.

4.6 Alternate proposal. If a potential contractor responds to the RFP for the specified partsmanagement process and in addition offers a different parts management process with advantages (e.g.,life cycle cost) to the AA substantiated, the source selection team should consider both and select thebest for the AA. Under no circumstances should the potential contractor be penalized for offering whatmay be more beneficial to the AA than the parts management process specified in the RFP.

4.7 Acquisition activity . To implement an effective parts management and standardization program,the AA must specify in the SOW the appropriate level of Government involvement and should monitorthe contractor performance accordingly. The following are the AA primary decisions and tasks:

4.7.1 Pre-contract award. The following are possible methods for ensuring that parts managementand standardization become part of the contractor’s development and/or production efforts:

a. Determine level of AA involvement needed and prepare SOW tasks, as applicable. Theoptions, with suitable tailoring, in section 5 should be the basis for this decision. Appendix Aprovides suggested SOW task statements.

b. Establish parts management and parts standardization criteria for contractor source selection.

c. Evaluate and negotiate tailoring of contractor’s parts management process before preparation ofcontract SOW, if applicable.

d. Determine the need for and methods to implement incentives for parts management andstandardization. (See appendix B).

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4.7.2 Post-contract award. Depending on the level of involvement, the following recommendationsare methods of monitoring the contractor:

a. If applicable, the AA or contractor can initiate a post -contract award meeting.

b. If applicable, assign Government IPT representative as responsible for participating in thecontractor parts management effort.

c. Include parts management and standardization agenda items for design reviews and programprogress reviews.

d. If applicable, review MPCAG recommendations and make them discussion items for the designreviews and program progress reviews.

e. As applicable, review the contractor parts lists and part procurement documentation of new partsfor compliance with the contractor's parts management program.

f. As applicable, evaluate contractor performance for standardization and nonproliferation. Also, ifapplicable, evaluate this performance against contractual incentive criteria.

4.7.3 Defense Logistics Agency Military Parts Control Advisory Groups. These Government groupswill provide assistance in selecting parts. Specific responsibilities are below:

a. Generate and maintain the GFBs and make them available to the AA and the contractor, eitherpaper copies or electronically.

b. Assign contract codes for MPCAG evaluations and recommendations.

c. Process part evaluation requests.

d. Track and analyze parts requests and as-built parts lists for usage trends for updating the GFBs.

e. Generate and maintain PPSL.

f. Maintain and upgrade, as necessary, the electronic data interchange system.

g. Serve as a repository of shared data from Government, contractor, and part suppliers.

h. Provide focal points for DMS and General Emulation of Microcircuits programs.

i. Provide contract support to the AA upon request.

4.7.4 Contractor. The contractor is to perform parts management in accordance with its response tothe solicitation or the SOW. The following suggestions are contractor responsibilities:

a. Participate in IPTs and in-process and design reviews which address parts management issues.

b. Provide data, such as as-built parts lists, to the MPCAG database, as required.

c. Submit part requests for all parts as contractually required for applicable options or tailoring.

d. Ensure the subcontractor parts selection process complies with the contract requirements.

e. Ensure the part selection and usage allow the equipment to meet the performance requirementsof the equipment specification.

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5. DETAIL GUIDANCE.

5.1 Parts Management option flexibility and tailoring . The four options defined below are all keyed tothe objectives of reducing life-cycle costs through parts standardization and minimizing future partsproliferation. These options include parts selection in the order of preference defined in 4.3. TheAcquisition Activity should accept the contractor's procedure, select another option, or negotiate tailoringof specific points.

5.1.1 Option A - No formal Government guidance . The contractor’s parts management program istotally an internal process in which the Government has no direct involvement. However, theGovernment does have an interest in ensuring that the contractor has a requirements based partsselection process which assures the product meets the performance criteria and minimizes life-cyclecosts. See figure 1.

FIGURE 1. Option A - No formal Government guidance.

The following procedures are for use for successful implementation of option A:

a. The contractor should respond to RFPs, by describing methods to reduce life cycle costs, achieveGIDEP participation, achieve parts standardization to minimize parts proliferation, and preventDMS cases.

b. Any monitoring of part selection and application by the AA and MPCAG should be limited to IPTinterfaces or as offered by the contractor.

c. There should be no Contract Data Requirements List (CDRL) Data Item Description (DID) for datadelivery for parts management.

d. The contractor may request advice from the AA and MPCAG on parts selections. If MPCAG partsadvice is requested, MPCASS is the preferred method of submitting part evaluation requests.

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5.1.2 Option B - AA guidance through program reviews and IPTs. The contractor’s parts managementprogram is an internal procedure that complies with Government guidance, but the Government requiresa level of participation in ensuring supportability over the life of the product. Also, the Government hasno interest in logistically maintaining the system or equipment. See figure 2.

FIGURE 2. Option B - Government guidance through program reviews and IPTs.

The following procedures are for use for successful implementation of option B:

a. The contractor should respond to RFPs, by describing methods to reduce life cycle costs, achieveGIDEP participation, achieve parts standardization to minimize parts proliferation, and preventDMS cases.

b. The AA monitors success of the program through contract language and scheduled periodicprogram reviews and interfaces with IPTs to assess the accomplishment of parts managementgoals and objectives and to discuss and resolve part problem areas/issues.

c. There should be no CDRL DID for parts submissions. However, the contract may require AA andMPCAG access to an as-built parts list.

d. The contractor may request advice from the AA and MPCAG on parts selections; however, thecontractor has no obligation to request or to accept such advice. If MPCAG parts advice isrequested, MPCASS is the preferred method of submitting the parts evaluation requests to theMPCAG.

e. Contractor may elect to establish a PCB even though it is not a contractual requirement.

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5.1.3 Option C - Government guidance with as-built parts list. The Government provides guidanceand acts as an advisor, while requiring the contractor to provide an as-built parts list to the AA andMPCAG. See figure 3.

FIGURE 3. Option C - Government guidance with as-built parts list.

The following procedures are for use for successful implementation of option C:

a. The contractor should respond to RFPs by describing methods to reduce life cycle costs, achieveGIDEP participation, achieve parts standardization to minimize parts proliferation, and preventDMS cases.


c. MPCAG will provide access to the GFBs to the contractor for part selection assistance.

d. The contractor may request advice from the AA and MPCAG on parts selections; however, thecontractor has no obligation to request or to accept such advice. If MPCAG parts advice isrequested, MPCASS is the preferred method of submitting the parts evaluation requests to theMPCAG.

e. The contract may require the contractor, or the contractor may elect, to establish a PCB, or the contractor may elect to do so.

f. The SOW should have a task and a data item to deliver an as-built parts list to the AA and the MPCAG in accordance with the contract.

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5.1.4 Option D - Government advisor in parts selection . The Government acts as an advisor in theparts management program by making it mandatory for the contractor to seek Government advice onparts selected for the design and manufacture of the product. See figure 4.

FIGURE 4. Option D - Government advisor in parts selection.

The following procedures are for use for successful implementation of option D:

a. The contractor should respond to RFPs by describing methods to reduce life cycles costs achieveGIDEP participation, achieve parts standardization to minimize parts proliferation, and preventDMS cases.


c. The RFP and/or SOW should specify the baseline parts selection list for the program or contract. Parts on this list are standard and approved. This list may be the GFBs (electrical and/ormechanical), approved corporate baseline, and/or a list of pre -approved parts provided by the AA. The MPCAG will provide access to the GFBs to the contractor for part selection assistance.

d. All selected parts and parts data should be submitted for AA, AA’s agent, and/or MPCAG reviewand recommendation in accordance with the CDRL. Use of other than the Governmentrecommended part should be resolved by the contractor prior to design application. The resolutionshould be documented, retained, and made available to the AA upon request. MPCASS is thepreferred method of submitting the part evaluation requests to the MPCAG.

e. The contract may require the contractor to establish a PCB, or the contractor may elect to do so.

f. The SOW should have a task and a data item to deliver an as-built parts list to the AA and the MPCAG in accordance with the contract.

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5.2 Government/Industry Data Exchange Program (GIDEP). The contract task statement, for theparts management program, should address participation in GIDEP.

5.3 Diminishing Manufacturing Sources (DMS) requirement . If DMS is a concern for a program or acontract, then the AA should specify in the SOW any requirement for identifying and/or resolving, duringa specified time period, the DMS or obsolescence problems, such as maintaining replacement sources,searching and reporting on alternative or replacement parts, redesigning, etc.

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6. NOTES.

6.1 Comparison of options. Table I compares the four options regarding specific tasks orresponsibilities that the AA may impose or prohibit in the RFP, SOW, or contract. The RFP and/or SOWshould specify the individual task or responsibility expected of the contractor.

TABLE I. Comparison of contractual options for parts management .

TASK ORRESPONSIBILITY

OPTION ANO FORMAL

GOVERNMENT GUIDANCE

OPTION BAA GUIDANCE

THROUGHPROGRAM

REVIEWS &IPTs

OPTION CGOVERNMENT

GUIDANCE WITH AS-BUILT PARTS

LIST

OPTION DGOVERNMENT ADVISOR IN

PARTS SELECTION

PARTSMANAGEMENTPROCESS

Contractor’sdescription ofprocessmethodology

Assesscontractor’s partsmanagementprocess

Assess contractor’sparts managementprocess

Assess contractor’sparts managementprocess

MONITORING Limited to normalIPT interfaces

Specified inSOW.Scheduledreviews and IPTinterfaces

Specified in SOW.Scheduled reviewsand IPT interfaces

Specified in SOW.Scheduled reviewsand IPT interfaces

PARTS SELECTIONCRITERIA

Contractor’soption in order tomeet systemoperationalrequirements andlife cycle costseffectiveness

Contractor’soption in order tomeet systemoperationalrequirements andlife cycle costseffectiveness

Contractor’s optionin order to meetsystem operationalrequirements andlife cycle costseffectiveness

Parts selection listspecified in SOW

GFB APPLICATION No requirement,but MPCAGprovided GFB isavailable

No requirement,but MPCAGprovided GFB isavailable

MPCAG providedGFB should be used

MPCAG providedGFB should be used

REVIEW OFPARTSSELECTIONS

Contractor mayrequest advice ofAA and MPCAG



Contractor mustrequest advice of AAand MPCAG

DATA (CDRL) None allowed None, but contractshould allowaccess to as-builtparts list

As-built parts list toAA and MPCAG atdesign completion

Part evaluationrequests. As-builtparts list to AA andMPCAG at designcompletion

PARTS CONTROLBOARD

N/A Contractor mayuse

Contractor may useor contract mayrequire

Contractor may useor contract mayrequire

GIDEP participation perAA requirements

participation perAA requirements

participation per AArequirements

participation per AArequirements

DMS Addressobsolescenceissue per AA requirements

Addressobsolescenceissue per AA requirements

Addressobsolescence issueper AA requirements

Addressobsolescence issueper AA requirements

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MIL-HDBK-965

6.2 Applicable part categories. The items in the following lists should be subject to the guidance in thisdocument and the contract requirements. These lists are tailorable and should include only those itemsof interest for the system or equipment being acquired.

6.2.1 Mechanical parts.

FSC 2/ PART CATEGORY NAMERESPONSIBLE

MPCAG

3110 Bearings, antifriction, unmounted DISC3120 Bearings, plain, unmounted DISC3130 Bearings, mounted DISC4030 Cable fittings, etc. DISC4710 Pipes and tubes DSCC4720 Hoses and tubing DSCC4730 Tube fittings, hose clamps DSCC4820 Valves, nonpowered DSCC5305 Screws DISC5306 Bolts DISC5307 Studs DISC5310 Nuts and washers DISC5315 Pins DISC5320 Rivets DISC5325 Fastening devices DISC5330 Seats and packing DISC5340 Miscellaneous hardware limited to: Bolts (barrel, chain, flush, and strap);

brackets; caps, protective; casters; clips; handles; hinges; latches;locks; mounts, resilient; padlocks; pads, stock mount; rod ends; slidesections, drawer; straps; turn-buckles; and wire fabric

DISC

5360 Springs, coil, flat and wire DISC5365 Rings, shims, and spacers DISC

__________2/ FSC - Federal Supply Class

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MIL-HDBK-965

6.2.2 Electrical and electronic parts.

FSC PART CATEGORY NAMERESPONSIBLE

MPCAG

4140 Miniature blowers (for cooling electronic equipment) DSCR5355 Knobs and pointers DSCR5905 Resistors DSCC5910 Capacitors DSCC5915 Filters and networks DSCC5920 Fuses and lightning arresters DSCC5925 Circuit breakers DSCC5930 Switches DSCC5935 Connectors, electrical and associated handtools under FSCs 5120, 5130,

5180, and 5220DSCC

5940 Lugs, terminals, and terminal strips DSCR5945 Relays, contactors, and solenoids DSCC5950 Coils and transformers DSCC5955 Crystals DSCC5961 Semiconductor devices (transistors and diodes) and associated

hardwareDSCC

5962 Microelectronic circuit devices (including hybrids) DSCC5965 Headsets, handsets, microphones, and speakers DSCC5970 Electrical insulators DSCR5975 Electrical hardware and supplies limited to: Cable ties and clamps;

electronic equipment cabinets; conduit tubing; rigid and flexible metalconduit fittings; conduit outlet boxes; junction boxes, extensions, andcovers; stuffing tubes; and wall plates

DSCR

5980 Optoelectronics, light emitting diodes, and displays DSCC5985 Waveguides and radio frequency switches (antennas are excluded) DSCC5995 Cable, cord, and wire assemblies DSCC5998 Electrical and electronic assemblies limited to: boards, cards, and

associated hardwareDSCC

5999 Miscellaneous electrical and electronic components limited to: mountingpads; electromagnetic interference gasketing material; delay lines; heatsinks; and wire mesh

DSCC

6004 Fiber optic rotary joints DSCC6005 Fiber optic couplers, spliters, and mixers DSCC6006 Fiber optic attenuators DSCC6007 Fiber optic filters DSCC6008 Fiber optic multiplexers/demultiplexers DSCC6010 Fiber optic conductors DSCC6015 Fiber optic cables DSCC6020 Fiber optic cable assemblies and harnesses DSCC6021 Fiber optic switches DSCC6025 Fiber optic transmitters DSCC6026 Fiber optic receivers DSCC6029 Fiber optic repeaters DSCC6030 Fiber optic devices DSCC6031 Fiber optic integrated optical circuits DSCC6032 Fiber optic light sources DSCC6033 Fiber optic photo detectors DSCC6034 Fiber optic modulators DSCC6035 Fiber optic illuminators DSCC6036 Fiber optic image transfer devices DSCC6040 Fiber optic sensors

16

DSCC

MIL-HDBK-965

FSC PART CATEGORY NAMERESPONSIBLE

MPCAG

6050 Fiber optic passive devices DSCC6060 Fiber optic interconnection DSCC6070 Fiber optic accessories and supplies DSCC6080 Fiber optic kits and sets DSCC6099 Fiber optic miscellaneous DSCC6135 Batteries, primary (nonrechargeable) DSCR6140 Batteries, secondary (rechargeable) DSCR6145 Wire and cable, electrical DSCC6150 Electrical power cords and grounding straps DSCR6210 Lighting devices DSCR6240 Electric lamps DSCR6350 Horns, bells, buzzers, and sirens DSCR6625 Meters, electrical indicating DSCC6645 Time totaling meters DSCR6680 Mechanical fluid flow and quantity measuring devices DSCR6685 Pressure, temperature, and humidity measuring and controlling devices DSCR

DSCC - Defense Supply Center Columbus DSCC - VSC Columbus, Ohio 43216-5000Telephone: DSN: 850-4144 Fax: 614-692-1753

DSCR - Defense Supply Center Richmond DSCR - VED Richmond, Virginia 23297-5000Telephone: DSN: 695-4887 Fax: 804-279-6011

DISC - Defense Industrial Supply Center DISC - EPP Philadelphia, Pennsylvania 19111-5000Telephone: DSN: 442-6833 Fax: 215-697-0682

6.3 Subject term (key word) listing.

AcquisitionGovernment Furnished Baseline (GFB)MPCAGMPCASSParts Management

6.4 Changes from previous issue. Marginal notations are not used in this revision to identify changeswith respect to the previous issue due to the extent of the changes.

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MIL-HDBK-965

APPENDIX A

OPTIONS FOR STATEMENT OF WORK TASKS

A.1 GENERAL.

A.1.1 Scope. This appendix contains suggested wording for new contract SOWs. The differentoptions are those specified in 5.1. This appendix also contains suggested task statements for DMS andGIDEP.

A.1.2 Application. Before determining the SOW wording, consider the following factors:

a. Type of equipment or system; for example, operational system, operational support equipment,test vehicle, maintenance or shop test equipment.

b. DoD-wide part proliferation is a stated major concern.

c. Whether the contract is an investigative or study contract.

d. Quantity of systems or equipment’s to be purchased on the contract.

e. Reliability, safety, or nuclear hardness criticality of the part or equipment, coupled with theenvironment where used (e.g., flight, ground combat, ground benign, etc.).

f. Whether the item is a new design or a modification of an existing design and if a modification, theextent of that modification.

g. Maintenance concept: organic or contractor.

h. Whether all or some of the equi pment is commercial or NDI.

i. Whether the equipment is almost exclusively electrical or mechanical.

j. Ownership and level of technical data package, if required.

Depending upon the criteria above, there may be different tasks for different types of equipment withinthe same SOW. If so, each task should identify the level of parts management applicable to the specificequipment or types of equipment (such as support or test equipment).

A.1.3 Tailoring assistance. Prior to the release of an acquisition request for proposal and uponrequest, the MPCAG can provide tailoring assistance and information related to the MPCAG.

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MIL-HDBK-965

APPENDIX A

A.2 STATEMENT OF WORK EXAMPLES.

A.2.1 Tasks for the four options. The specific acquisition requirements may require the tailoring of theprincipal SOW tasks.

A.2.1.1 Option A. To invoke option A, the AA may use or tailor the following wording:

“The contractor shall select parts and conduct a parts management program, in accordance with thecontractor's standard procedures, which assures the equipment (or system) meets the specificationperformance requirements with the lowest life cycle costs.”

Optional task: “Within ___ days after contract award, the contractor shall provide a copy of theirdocumented internal procedures.”

Additional optional statement: “The contractor may request parts selection and application advice fromthe Acquisition Activity and the Military Parts Control Advisory Group.”

A.2.1.2 Option B. To invoke option B, the AA may use or tailor the following wording:

“The contractor shall select parts and conduct a parts management program, in accordance with thecontractor's standard procedures, which assures the equipment (or system) meets the specificationperformance requirements with the lowest life cycle costs. The Acquisition Activity will conduct quarterly(semiannual, annual, etc.) reviews of the parts program to assess conformance to internal procedures,application of parts for meeting system performance requirements, and parts problem areas.”



A.2.1.3 Option C. To invoke option C, the AA may use or tailor the following wording:

“The contractor shall select parts from a parts selection baseline and conduct a parts managementprogram, in accordance with the contractor's standard procedures, that assures the equipment (orsystem) meets the specification performance requirements with the lowest life cycle costs. A source forselecting parts is be the (select one: (a) electrical, (b) electronic (c) mechanical, or (d) electro-mechanical) Government Furnished Baseline(s). The Acquisition Activity will conduct quarterly(semiannual, annual, etc.) reviews of the parts program to assess conformance to internal procedures,application of parts for meeting system performance requirements and parts problem areas.

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MIL-HDBK-965

APPENDIX A

“Within ___ days after design completion, the contractor shall provide to the Acquisition Activity and theMilitary Parts Control Advisory Group an as-built parts list of all (select one: (a) electrical, (b)mechanical, or (c) electrical and mechanical) part numbers, including replacements, used in the finalas-built configuration (data item number for parts list), and the documentation for nonstandard parts.”


Optional task: “The contractor shall convene a parts control board to address parts management issues.”


A.2.1.4 Option D. To invoke option D, the AA may use or tailor the following wording:

“The contractor shall select parts and conduct a parts management program, in accordance with thecontractor's standard procedures, that assures the equipment (or system) meets the specificationperformance requirements with the lowest life cycle cost. Also, (select one: (a) electrical, (b)mechanical, or (c) electrical and mechanical) parts selection shall be from the (select as applicable: electrical, mechanical, etc.) Government Furnished Baseline(s) (and the preapproved list of parts, ifapplicable). Parts not on this (these) list(s) are nonstandard and require submittal, along with appropriatedata, to the Military Parts Control Advisory Group (MPCAG) (and the Acquisition Activity (AA), or theagent for the AA, if applicable) for evaluation. The Contractor shall follow the MPCAG (or the AA, or theagent for the AA, if applicable) recommendation if possible and practical for the intended use. If therecommendation is not followed, the Contractor shall document why the part is not used and supply thatinformation to the MPCAG (and the AA, or the agent for the AA, if applicable) (data item number for thenonstandard part request).

“The Acquisition Activity will conduct quarterly (semiannual, annual, etc.) reviews of the parts program toassess conformance to internal procedures, application of parts for meeting system performancerequirements, and parts problem areas.

“Within ___ days after design completion, the contractor shall provide to the AA and the MPCAG anas-built parts list of all (select one: (a) electrical, (b) mechanical, or (c) electrical and mechanical) partnumbers, including replacements, used in the final as -built configuration (data item number for parts list),and the documentation for nonstandard parts.”


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MIL-HDBK-965

APPENDIX A

Optional task: “The contractor shall convene a parts control board to address parts management issues.”

A.2.2 DMS task. The DMS task should be separate from the parts management options. The DMStask could be applicable to all options, and the AA must decide if the period of expected use, criticality,and cost of the hardware to be purchased warrant a DMS task. Suggested SOW wording is as follows:

“The contractor shall review, through the period of performance of the contract, the Government/IndustryData Exchange Program (GIDEP) Diminishing Manufacturing Source (DMS) notices and other suppliernotifications for applicability of the (optional added word: operational) hardware being delivered. Thecontractor shall notify the Acquisition Activity within ___ days of any DMS situation that effects currentdeliveries or subsequently will effect equipment maintenance and repair (data item number fornotification of DMS problems).”

Optional task: “Through the period of performance of the contract, the contractor shall: (1) identifyalternate sources, replacement parts, or optional part numbers for parts and materials that becomeobsolete and (2) revise the assembly drawings to incorporate the new information. If a directreplacement is not possible, the contractor shall notify the Acquisition Activity.”

A.2.3 GIDEP task. The GIDEP task should be separate from the above options and is appropriate withany of them. The decision on whether to impose the GIDEP task should be based on the factors in A.2.2above, but the GIDEP task would be most applicable to options C and D. Suggested SOW wording is asfollows:

“The contractor shall participate in the Government/Industry Data Exchange Program (GIDEP) ALERTsand PROBLEM ADVISORYs for potential impact to hardware both in production and delivered to theAcquisition Activity. If an ALERT or Problem ADVISORY has the possibility of causing a systemmalfunction or of inhibiting the specified performance, the contractor shall notify the Acquisition Activity. For ALERTs or PROBLEM ADVISORYs that identify parts or materials that are noncompliant tohardware specifications or drawings but do not affect performance requirements of production items, thecontractor shall dispose of them through the internal quality assurance process (data item number forGIDEP response).

21

MIL-HDBK-965

APPENDIX B

INCENTIVES (GUIDANCE TO THE AA)

B.1 GENERAL. The goal of incentives is to encourage, promote, and reward innovative efforts thatare effective. Incentives work best when they reward the contractor and the employees involved in theprocess. Incentive programs should flow down from the prime contractors to their parts managementprofessionals and to subcontractors and their parts management functions.

B.2 FORMS OF INCENTIVES.

a. Monetary.

b. Reduced oversight and control.

c. Reduced level of parts management option (e.g., allow going from option D to option C).

d. Positive considerations during proposal review and selection process.

e. Nonmonetary awards (plaques, recognition, letters of commendation).

f. Allowing proposed innovative parts management techniques to be implemented on programs andadopted when proven effective.

g. Allowing subcontractors to submit part requests directly to the MPCAG through MPCASS.

h. Contractor initiated incentives to their parts management professionals.

B.3 ITEMS WORTHY OF INCENTIVES.

a. Cost avoidance.

b. Reduced work hour requirement over the life of a program.

c. Innovative, effective solutions to parts managem ent problems.

d. Effective subcontractor management.

e. Automation of internal parts management functions.

f. Empower internal parts management process.

g. Record of exemplary past performance.

h. Efficient training process for contractor personnel and subcontractors.

i. Enhanced performance, reliability, or quality at no increase in total life-cycle cost.

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MIL-HDBK-965

APPENDIX B

j. IPT/team organizational structure that includes the prime contractor, subcontractors, customers, MPCAG, and parts manufacturers.

k. Elimination of non -value added tasks.

l. Effective DMS management.

m. Open, ethical resolution of internal errors.

B.4 METRICS. By developing standard methods of measuring and documenting parts managementexcellence, achievement, and efficiency, an equitable measure in quality and quantity of earnedincentives may be determined.

Some examples of metrics that accurately reflect the quality of a parts management program are:

a. Reduce life cycle costs.

b. Work hour savings/work hours avoided.

c. Time reduced through automation.

d. Elimination of non -value added tasks.

Some metrics can be misleading and overstate gains or losses in the perceived quality of the partsmanagement process. This is due to the numerous differences in contract types (e.g., engineering andmanufacturing development, production, etc.), parts management options, level of technology involved,and other factors beyond the contractor’s control. Some examples of metrics to avoid are:

a. Number or percentage of GFB parts selected.

b. Number or percentage of MPCAG recommended parts used.

c. Number or percentage of nonstandard part requests.

d. Number of parts submitted then not used.

e. Number or percentage of disapproved parts.

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MIL-HDBK-965

CONCLUDING MATERIAL

Custodians: Preparing activity: Army - MI DLA - ES Navy - AS Air Force - 10 DLA - ES

Review activities: (Project SDMP - 0020)Army - AL, AM, AR, AV, CR, ER, GL, HD, ME, MRNavy - EC, MC, OS, SA, SH, TDAir Force - 11, 13, 14, 15, 17, 18, 19, 26DLA - CS, GS, IS

24

STANDARDIZATION DOCUMENT IMPROVEMENT PROPOSAL

INSTRUCTIONS

1. The preparing activity must complete blocks 1, 2, 3, and 8. In block 1, both the document number and revision letter should be given.

2. The submitter of this form must complete blocks 4, 5, 6, and 7.

3. The preparing activity must provide a reply within 30 days from receipt of the form.

NOTE: This form may not be used to request copies of documents, nor to request waivers, or clarification ofrequirements on current contracts. Comments submitted on this form do not constitute or imply authorization towaive any portion of the referenced document(s) or to amend contractual requirements.

I RECOMMEND A CHANGE: 1. DOCUMENT NUMBER MIL-HDBK-965

2. DOCUMENT DATE (YYMMDD) September 26, 1996

3. DOCUMENT TITLE Military Handbook, Acquisition Practices for Parts Management

4. NATURE OF CHANGE (Identify paragraph number and include proposed rewrite, if possible. Attach extra sheets as needed.)

5. REASON FOR RECOMMENDATION

6. SUBMITTER

a. NAME (Last, First, Middle initial) b. ORGANIZATION

c. ADDRESS (Include Zip Code) d. TELEPHONE (Include Area Code)

(1) Commercial

(2) AUTOVON (If applicable)

7. DATE SUBMITTED (YYMMDD)

8. PREPARING ACTIVITY

a. NAME Defense Supply Center, Columbus

b. TELEPHONE (Include Area Code)(1) Commercial (2) AUTOVON (614) 692-3965 850-3965

c. ADDRESS (Include Zip Code)DSCC-VS3990 East Broad StreetColumbus, OH 43216-5000

IF YOU DO NOT RECEIVE A REPLY WITHIN 45 DAYS, CONTACT: Defense Quality and Standardization Office 5203 Leesburg Pike, Suite 1403, Falls Church, VA 22041-3466 Telephone (703) 756-2340 AUTOVON 289-2340

DD Form 1426, OCT 89 Previous editions are obsolete 198/290

Documents

MILITARY HANDBOOK · MIL-HDBK-965 1. SCOPE. 1.1 Purpose. This handbook is a guide for Military Acquisition Activities (AA) in the evaluation of contractor responses to Requests for